Permian continues to create demand for workforce housing

Updated 10:54 am, Monday, August 14, 2017

Target Logistics just added another 180 premium rooms to the Pecos Lodge, following the addition last November of 100 rooms.

Target Logistics just added another 180 premium rooms to thePecos Lodge, following the addition last November of 100 rooms.

Photo: Facebook/Target Logistics

Permian continues to create demand for workforce housing

1 / 1

Back to Gallery

As crude prices crashed, rigs were laid down and tens of thousands left the nation’s oil fields, a number of lodges and “man camps” closed their doors -- except in the Permian Basin, where operators managed to remain active.

“One word: resilience,” Troy Schrenk, senior vice president, business development for Target Logistics, said in a phone from his office in The Woodlands.

“The Permian Basin was resilient compared to other basins where we operate,” he said. “The Permian Basin, in the downturn beginning in 2014 until now, proved to be resilient. There was a good level of activity that occurred, even in the downturn. We continued to support our same customers in the Permian Basin with those levels of activity. We were still busy in the Permian Basin.”

It was noticeably different in other basins, he said, citing the Bakken in North Dakota, where the rig count was significantly lower.

More from Oil Report

“But the Permian Basin was a strong basin for lodging with its existing workforce. In the middle of the downturn, we built a 220-bed lodge in the Delaware Basin for Anadarko. I think that’s another indicator of the Permian Basin being resilient and our customers making capital investments in the Permian,” Schrenk said.

Target Logistics arrived in the Permian Basin in 2012 with the opening of Pecos Lodge, which initially had 80 beds. The company just added another 180 premium rooms, following the addition last November of 100 rooms. Target is set to expand further when it completes its acquisition of Iron Horse Ranch and its West Texas lodges.

“Fast forward to today, as we now have 2,100 beds in the Permian. That’s over 90 percent compounded annual growth,” Schrenk said. “That’s a strong barometer of the level of activity in the Permian, even through the low and long downturn.”

As Target has expanded its workforce lodging, changes have been made to accommodate the preferences of the millennials working in the field — primarily their preference for private rooms, he said.

A lot of the workforce left the industry during the downturn either voluntarily or involuntarily, and as companies — both exploration and production companies and service companies — seek to recruit and retain new workers, Schrenk said the quality accommodations offered at his company’s lodges can be a valuable asset.

Beyond that, he sees the company’s lodges as vital to safety.

“It’s dangerous to work on location; it’s also dangerous to drive to location. Every way we can provide a lodge in close proximity to where they’re working, where development is going, we can help ensure those workers arrive at location safely,” he said.

It also affects his customers’ bottom line, he said.

“Producers are looking for every advantage. They’re asking, ‘How do I get better results at the wellhead? How do I get the best out of my people working at the wellhead?’ What happens the 12 hours they’re not at the wellhead can have an impact,” Schrenk said.

By providing accommodations that ensure those workers are well-rested, well-fed and cared for, “that’s the advantage. They’re more productive and, more importantly, they’re safer producers. They’re working with complicated equipment, technical equipment, expensive equipment, dangerous equipment. That safety culture should extend beyond the well site, beyond the location. It should be a 24-hour safety culture, and our lodging is an extension of that culture.”

With five lodges in Texas and two in New Mexico, Schrenk expects Target Logistics to continue expanding as activity in the Permian continues.

“We believe there are gaps to fill in the Permian Basin and we will continue to work with our customers to evaluate those gaps and support their activities. We’re poised to evaluate those gaps for the rest of this year into 2018,” he said.